Amid the buildup to the Facebook IPO, serial entrepreneur Steve Blank was sounding an ominous warning to anyone who would listen.

Not about Facebook nor about its IPO. Instead, he was making a larger point. Blank, one of the valley's most influential voices on entrepreneurship, worries that venture capitalists and angel investors -- and he doesn't exclude himself -- have become too obsessed with the quick returns promised by social media. It just doesn't make the same financial sense to pour money into companies that might be more innovative but take longer to pay off in fields like medicine or robotics.

By distorting investment priorities, Blank fears that social media is killing Silicon Valley.

"I think it's pushing real innovation outside of our country," Blank said. "And it might be the demise of what we actually do in Silicon Valley."

To remedy this, or at least restore some balance, Blank believes investment decisions being driven by the free market need to be augmented with some type of government strategy or involvement. While he's not promoting one strategy, Blank has become deeply involved with an effort by the National Science Foundation to encourage researchers and scientists to explore how they can guide their work from the lab to the marketplace.

The program is called NSF Innovation Corps, or I-Corps. And on Wednesday, 25 teams of researchers participating in the program convened at Stanford, where Blank teaches entrepreneurship, to present the work they've done to develop a business plan around their lab work.

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It's no surprise the NSF would turn to Blank, who worked at or founded several startups in the '80s and '90s. He now invests and teaches entrepreneurship at Stanford where his work has gained a wide following among high-tech founders.

The I-Corps teams span a wide range of categories the NSF funds, including biological sciences, computer and information science, mathematics, and social and economic sciences. Blank says many of these folks are engaged in the type of work that could have a profound impact on their fields and the marketplace, but often struggle to attract commercial funding once their research ends.

"We're investing in social media rather than this stuff," Blank said. "Imagine hundreds of these guys doing real science, making cancer drugs, and they can't get investment. Why should venture capitalists wait five or seven years to see if this will work when Instagram sold for $1 billion after 18 months?"

The NSF started the program last year, and the 25 teams that appeared Wednesday are the second class to participate in I-Corps. Anyone receiving an NSF grant can apply, and if accepted, they receive an extra $50,000 to spend several months exploring the business potential of their work.

Blank, who is not paid for his work, developed a course that the teams take at the start of their project. The course teaches them about Blank's approach to entrepreneurship, which encourages founders to conduct heavy research with potential customers and try to see products from their perspective.

The impact on each of the teams I saw was pretty stark. Each of them fundamentally changed their product in some fashion that seemed to fit better with what they heard customers needed. For instance, one team from Georgia Tech discovered that a complex digital visualization tool it thought would be of interest to the roofing industry would be much more useful if the team stripped away many of the features and turned it into a smartphone app that anyone could use.

A research team from the University of Arkansas discovered after talking to numerous biotech companies that a protein it had developed could dramatically lower the cost of producing biopharmaceuticals, enough that it could even turn some struggling biotech companies profitable.

"We had this really cool technology that we didn't know what to do with," said Ellen Brune, a Ph.D. candidate. Brune is also chief scientific officer of the company she and her colleagues created, Boston Mountain Biotech. "This program has made all the difference," she said.

Dedric Carter, NSF's senior adviser for strategic initiatives, said the agency created the program last year because too often, breakthroughs like this just sat on shelves because the developers had no sense of how to commercialize them. The NSF wanted a low-cost way to give them a nudge, and so developed the $7.5 million program with Blank.

"Many of these ideas fall into a gap after their research funding ends and they don't know how to raise private funding," Carter said. "We want to help them push it forward."

Blank is more comfortable working with the government than many in this region because he's long recognized the role federal agencies have had in creating Silicon Valley. From early research funding during World War II to investments in venture capital firms in the '50s and '60s to the more recent loans to green-tech startups, Blank said Silicon Valley owes a big part of its success to the federal government.

He's not sure exactly what shape that involvement should take now. But he's sure the valley is on a dangerous path if it believes the free market will keep it pointed in the right direction.

"Saying there is no role for government is being naive and ignoring the way the valley has benefited from government," Blank said. "Money goes where it's easier to make money. But that's not always in our national interest."